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Gibson Corporation expects to incur indirect overhead costs of $74,750 per month and direct manufacturing costs of $24 per unit. The expected production activity for
Gibson Corporation expects to incur indirect overhead costs of $74,750 per month and direct manufacturing costs of $24 per unit. The expected production activity for the first four months of the year are as follows. January February 4,500 8,500 Estimated production in units March 3,700 April 6,300 Required a. Calculate a predetermined overhead rate based on the number of units of product expected to be made during the first four months of the year. b. Allocate overhead costs to each month using the overhead rate computed in Requirement a. c. Calculate the total cost per unit for each month using the overhead allocated in Requirement b. Required A Required B Required C Calculate a predetermined overhead rate based on the number of units of product expected to be made during the first four months of the year. Predetermined overhead rate per unit Required A Required B Required C Allocate overhead costs to each month using the overhead rate computed in Requirement a. Month Allocated Cost January February March April Total Calculate the total cost per unit for each month using the overhead allocated in Requirement b. Month March January 4,500 February 8,500 April 6,300 3,700 Number of units Expected cost Overhead Direct costs Total cost Cost per unit
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